MicroAlgo's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
58% of the business is held by the top 2 shareholders
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls MicroAlgo Inc. (NASDAQ:MLGO), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Clearly, public companies benefitted the most after the company's market cap rose by US$81m last week.
Let's take a closer look to see what the different types of shareholders can tell us about MicroAlgo.
What Does The Lack Of Institutional Ownership Tell Us About MicroAlgo?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of MicroAlgo, for yourself, below.
NasdaqCM:MLGO Earnings and Revenue Growth June 26th 2024
Hedge funds don't have many shares in MicroAlgo. The company's largest shareholder is WiMi Hologram Cloud Inc., with ownership of 48%. With 9.2% and 3.0% of the shares outstanding respectively, Masaya Otsuka and Joyous JD Limited are the second and third largest shareholders.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of MicroAlgo
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Shareholders would probably be interested to learn that insiders own shares in MicroAlgo Inc.. It has a market capitalization of just US$114m, and insiders have US$11m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
It seems that Private Companies own 4.8%, of the MicroAlgo stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Public Company Ownership
It appears to us that public companies own 48% of MicroAlgo. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - MicroAlgo has 3 warning signs we think you should be aware of.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
